Taming the Elephant Persuading landlords to invest
Description: Taming the Elephant Persuading landlords to invest in energy efficiency Bob Thompson RETRI Group btretrigroup.com realindustrial Qiulin Ke Nottingham Trent University Qiulin.kentu.ac.uk Conventional supply model Energy supplier Energy
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slide1. Taming the Elephant Persuading landlords to invest in energy efficiency Bob Thompson
RETRI Group
bt@retrigroup.com
@realindustrial Qiulin Ke
Nottingham Trent University
Qiulin.ke@ntu.ac.uk<br>
slide2. Conventional supply model Energy supplier Energy supplier Energy supplier Landlord Tenant Tenant Tenant Tenant Tenant Tenant<br>
slide4. Key drivers for investment in energy efficiency Source: EEI Survey (2011)<br>
slide5. Barriers to energy efficiency<br>
slide6. Conventional supply model Energy supplier Energy supplier Energy supplier Landlord Tenant Tenant Tenant Tenant Tenant Tenant<br>
slide7. Conventional supply model Energy supplier Energy supplier Energy supplier Landlord Tenant Tenant Tenant Tenant Tenant Tenant INVESTMENT = REDUCED COSTS<br>
slide8. Conventional supply model Energy supplier Energy supplier Energy supplier Landlord Tenant Tenant Tenant Tenant Tenant Tenant INVESTMENT = INCREASED COST REDUCED COSTS Increase in rent?
Increase in value?<br>
slide9. ESCO supply model Power Generation Energy supplier Landlord Tenants ESCO Reduced operating costs
Potential return
Defrayed business risk Increase in rent?
Increase in value?<br>
slide10. UK lags behind<br>
slide11. Barriers to ESCO development Low awareness of and lack of information about the ESCO concept;
Mistrust from the clients;
High perceived technical and business risks;
Public procurement rules and accounting rules (including off balance sheet regulations);
Lack of accepted standardized measurement and verification procedures;
Administrative hurdles and high transaction costs;
Principal/agent dilemma with split incentives ;
Aversion to outsourcing energy;
Lack of appropriate forms of finance;
Low priority of energy efficiency measures.<br>
slide12. Conclusions – ESCO gives Potentially significant ROI
Better environmental outcomes
Potentially higher rents and values
BUT WE NEED
Better exposition of the costs and benefits of the ESCO approach;
Better understanding of the energy/ utility requirements of building occupiers;
Better promotion of the concept to property owners and landlords<br>
RETRI Group
bt@retrigroup.com
@realindustrial Qiulin Ke
Nottingham Trent University
Qiulin.ke@ntu.ac.uk<br>
slide2. Conventional supply model Energy supplier Energy supplier Energy supplier Landlord Tenant Tenant Tenant Tenant Tenant Tenant<br>
slide4. Key drivers for investment in energy efficiency Source: EEI Survey (2011)<br>
slide5. Barriers to energy efficiency<br>
slide6. Conventional supply model Energy supplier Energy supplier Energy supplier Landlord Tenant Tenant Tenant Tenant Tenant Tenant<br>
slide7. Conventional supply model Energy supplier Energy supplier Energy supplier Landlord Tenant Tenant Tenant Tenant Tenant Tenant INVESTMENT = REDUCED COSTS<br>
slide8. Conventional supply model Energy supplier Energy supplier Energy supplier Landlord Tenant Tenant Tenant Tenant Tenant Tenant INVESTMENT = INCREASED COST REDUCED COSTS Increase in rent?
Increase in value?<br>
slide9. ESCO supply model Power Generation Energy supplier Landlord Tenants ESCO Reduced operating costs
Potential return
Defrayed business risk Increase in rent?
Increase in value?<br>
slide10. UK lags behind<br>
slide11. Barriers to ESCO development Low awareness of and lack of information about the ESCO concept;
Mistrust from the clients;
High perceived technical and business risks;
Public procurement rules and accounting rules (including off balance sheet regulations);
Lack of accepted standardized measurement and verification procedures;
Administrative hurdles and high transaction costs;
Principal/agent dilemma with split incentives ;
Aversion to outsourcing energy;
Lack of appropriate forms of finance;
Low priority of energy efficiency measures.<br>
slide12. Conclusions – ESCO gives Potentially significant ROI
Better environmental outcomes
Potentially higher rents and values
BUT WE NEED
Better exposition of the costs and benefits of the ESCO approach;
Better understanding of the energy/ utility requirements of building occupiers;
Better promotion of the concept to property owners and landlords<br>